Q1 2025 NetApp Inc Earnings Call Transcript
Key Points
- NetApp Inc (NTAP) delivered 8% year-over-year revenue growth in Q1, setting records for first-quarter operating margin and EPS.
- The company experienced notable momentum across its flash block, cloud storage, and AI segments, with all-flash storage revenue run rate reaching $3.4 billion, up 21% year-over-year.
- NetApp Inc (NTAP) saw broad-based demand across its all-flash storage portfolio, with strong growth in both capacity flash and block-optimized all-flash array families.
- The company's Keystone storage-as-a-service offering grew over 60% year-over-year, providing operational agility and reduced financial risk for customers.
- NetApp Inc (NTAP) raised its FY 25 outlook for both revenue and profit, reflecting confidence in continued success and alignment with customer needs.
- The uncertain macroeconomic environment and geopolitical risks continue to pose challenges, particularly affecting the US public sector market.
- Despite strong performance, the company has not yet seen large-scale data center refreshes, indicating a broader economic recovery is still pending.
- Public cloud segment revenue growth was modest at 3% year-over-year, with subscription services still acting as a headwind.
- Operating cash flow decreased by 25% year-over-year, driven by higher payments for strategic asset purchases.
- The company expects product gross margins to come down slightly as it works through pre-buys, potentially impacting profitability in future quarters.
Good day and welcome to the Net App first quarter of fiscal year and five earnings call. All participants will be in listen only mode should need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Kris Newton, Vice President, Investor Relations. Please go ahead.
Hi, everyone. Thanks for joining us. With me today are here George Kurian and CFO, Mike Barry. This call is being webcast live and will be available for replay on our website at netapp.com. During today's call, we will make forward-looking statements and projections with respect to our financial outlook and future prospects, including without limitation, our guidance for the second quarter and fiscal year 2025, our expectations regarding future revenue and profitability and shareholder returns and other growth initiatives and strategies. These statements are subject to
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